Africa short of green base stations

Feb 10, 2011

The number of green mobile base stations deployed in Africa remains small. It represents a mere 3,1% of the total number of deployments worldwide (9 558).

This news comes amid headlines this week on oil prices soaring to their highest level for two years as the value of Brent crude broke the $101.00 a barrel mark for the first time since October 2008.A large number of African mobile base stations require two sets of generators and in some cases up to three months supply of costly fuel in their tanks. More remote base stations may require fuelling by boat and hand-cart and in the larger markets, operators run large fleets of oil tankers to keep base stations supplied.Isabelle Gross, the author of the report published by Balancing Act called “Energy for Cellular Base Stations in Africa: the quick fix approach and the long term perspective to saving energy”, says: “Mobile operators shouldn’t take the lack of technical expertise for an excuse to do nothing. African mobile operators have to shift focus onto the cost side of the business that they are running. Energy expenditures are among the top items on their list”. Gross makes the point that “voice ARPU will carry on decreasing due to reducing prices on voice calls and the acquisition of new customers with much lower disposable income."This will put more pressure on mobile operators’ revenue. In Ghana for example voice ARPU went down from $17 in 2006 to $7 in 2010.The report also outlines that when it comes to saving on the energy bills, there is not an “out of the box” solution but it can be done. The best approach is to first look at how to run existing base stations more efficiently. In other words, the “quick fix” which consists of tweaking various elements of the base station to realise operational savings without incurring additional capital outlay. The cooling system is obviously a good starting point because it represents as much as 35% of the total electricity consumption of the base station. This proportion can increase to 50% if there are fewer transmitters in use. Mobile operators like Vodacom, Orange or MTN have started to experiment with “free cooling system” technology in conjunction or not for example with introducing higher operating temperature in the base station.While the report describes in detail the various approaches implemented by mobile operators to run their base stations more efficiently, it also looks at the renewable energy solutions that are currently available on the market for mobile operators to further reduce their energy bill. There is a growing choice of green solutions available (solar energy, wind power, bio-fuel powered base station, hydrogen fuel cells) but they all require a substantial initial capital investment.The report defines the business case for rolling out “green” base stations and gives example of African mobile operators that have started to implement renewable energy projects to power their base stations. It establishes that “at the low end in terms of capital investment first comes a combination of solar energy power combined to a diesel battery hybrid powering system. Operating costs like diesel are reduced but not totally eliminated. At the high end in terms of capital investment comes a combination of wind and solar power system backed by batteries which provides the maximum reduction in operating costs.According to Gross, “the “quick fixes” will help reduce operating costs but only to a certain point. Further reduction in operating costs will require some capital investment because it implies purchasing more energy efficient equipment or switching to renewable energy power solutions. Ultimately the financial decision lies with the mobile operator and depends on its capital investment strategy and its positioning in the market in the long term.